THE WHITE HOUSE
Office of the Press Secretary
(Seoul, Republic of Korea)
For Immediate Release 3:40 P.M. (L)
November 21, 1998
REMARKS BY THE PRESIDENT
IN DISCUSSION WITH KOREAN COMMUNITY LEADERS
National Folk Museum
Seoul, Republic of Korea
PRESIDENT CLINTON: Thank you. First of all, I would like to thank all of you for coming here today to meet with us. I wanted to have an opportunity while I was in Korea to hear directly from some people who are living through these changes and who have different views and different experiences that I would hope you would share with me, because I want very much to understand how what is happening in Korea today and where you are going actually affects the lives of the people here in this country.
And so that is why I wanted to do this. I thank you for being brave enough to come here and do this. Thank you for helping us. And I want to thank Senator Baucus and Assistant Secretary Koh for joining me -- he's coming home. And Senator Baucus and I feel at home here. And I want to thank my Ambassador. So maybe you guys could come around and we could begin the meeting. I think we're through with the photos.
Q Mr. President, you spoke earlier of your admiration for the resolute spirit with which Korean people are responding to what President Kim Dae-Jung has described as the most serious crisis in Korea since the Korean War. And I think we're fortunate to have a group of people around this table this afternoon who can give you some insight into how Korea is handling this crisis, what does the future look like here, and how individual Koreans and individual Korean companies are responding to what is happening here.
And I don't have any particular order. If you care to say anything to begin, other than what you've already said, or if perhaps some of our guests would care to speak and we can have what I hope will be a conversation.
THE PRESIDENT: I would only like to make two points. First of all, that all over the world today, even where there is a good economy, in the places where this financial crisis has not hit, even there, there is a tension between getting the benefits of the global economy and the information revolution, and preserving, if you will, the social contract, the stability of life that honors work and family and community.
And so one of the great challenges that we face is how to get the benefits of this emerging economy and still preserve an appropriate level of social cohesion and stability. And it's even an issue in the wealthiest countries of the world, you know, the ones that have not had any.
The second point I wish to make is that if you look at what has happened in Asia, in every case there are reasons which are unique to the country. That is, there are some problems that are particular to the country, but there are also common problems which cross the lines of country and which warn us very clearly that there must be -- at least in my opinion -- a global response not only to the present crisis, but to the long-term need to adapt the financial system of the world to the realities of the 21st century, so that we do not have this kind of thing occurring again, sweeping across national lines.
And I think there are some things that we have done and some things we can do to do that. So what is important for me -- of course, I want you to say whatever it is you would like to say to me, but what I am trying to do is to understand exactly what is happening here, your perspective on it, how it happened, why, and what you think either should be done further in Korea or what you believe the United States should do or advocate.
Q Good. Who would like to begin? Professor Sohn, would you like to start?
DR. SOHN: You just talked about two issues that you would like to talk about. First, if I may recap it, that the advanced countries and the emerging markets all share the same problem, that we need a social safety net. And also you talked about that although each country has its unique problems, we all share a common problem as well.
I would like to address the second issue first, if I may. Korea is a small country. Although we have accomplished economic growth, our size is relatively small. And we have made many efforts for reform, and like other East Asian countries we have had some fruits of these efforts, we have reaped some fruits. However, there are problems that Korea cannot resolve alone. Like you talked about, the international financial crisis is not something that we can do alone. Especially in this era of open environment in terms of economy, there are things that Korea cannot do alone.
When we talk about national stability we have to look toward international organizations such as the OECD or IMF or even the United States. And for the international economic and financial market to be stable we need some measures to be put in place by these organizations. Unless that happens it's very difficult for countries like Korea to maintain a very open and liberalized economy. Of course, there are many internal problems that caused the current economic crisis.
However, when we look at what actually triggered our crisis we believe the unstable characteristics of the international financial markets had some input into it.
PRESIDENT CLINTON: I agree with that. Who would like to go next?
MR. PARK: Yes, I am from the Federation of Korean Trade Unions. There are three Park here so I think the interpreter has kind of got us mixed up. Like Professor Jung* just mentioned the cause of the economic and financial crisis can be somewhat found inside Korea, the conglomerate problems and the political problems. However, we do have to realize that the international financial market does play a role.
But when we talk about the recovery of the Korean economy per se, we have to look to the United States because I believe the United States must maintain a stable economy. But if we look at it in this perspective, the United States recently lowered its interest rates and were very happy about that. And I believe that provides a very good opportunity. However, I'm sure the United States has your own position. And also, by lowering your interest rates I think you were trying to help other countries.
However, when you look at the trade relations with the United States for the past three years, we have actually marked not a surplus. And the Korean market is very unstable. We have bankruptcies -- and although the country is trying to work very hard, I believe that many people in the United States believe that the Korean government is unfairly subsidizing the steel industry.
However, you have to understand that we have about 100,000 people working in the steel industry. For instance, Pasca (phonetic) which is the major steel industry in Korea, is currently discussing plans for privatization. Then, after the Korean economy recovers we will continue to -- we will have to import raw material in order to continue our exporting.
Then it means that because we have to import our raw exports, in the end the United States will have an upper hand. So I believe we just shouldn't look at the short-term numbers, saying that the Korean steel industry is exporting too much or et cetera. We have to be very cruel, we have to look at the situation very cruelly, meaning that if the United States helps us now and thinks of Korea as a partner, in the long run Korea will recover and that will be good for the United States as well. And then we will be able to develop hand in hand.
So I would like to ask you, Mr. President, that when you go back if you could try to explain to your people our perspective. We believe that the United States and Korea are very good friends and we have had long relations. So if the United States people can be a little bit more patient about our situation and look at the long-term, we would appreciate it very much.
THE PRESIDENT: Maybe I could respond just for a minute. I would like to save my answer to Professor Chang until along toward the end because I want to talk more about the financial issues then. But I would like to just answer the steel question and the import question.
First of all, when Asia began to have such difficulties -- about a year ago now, I remember, it was really getting bad -- on our Thanksgiving holiday, which is next Thursday, last year, I spent three or four hours working on the problem in Indonesia. It became obvious to us that this problem would affect a lot of Asian countries and Russia. And so we made a decision, our government did, that we would first try to stop the problem from spreading. Second, we would try to help individual countries recover. And, third, we would look at the long-term causes of this and the long-term changes in the world economic system that needed to be made.
Now, we made a deliberate decision that we would make every effort to keep our markets as open as possible, even though we knew our trade deficit would go way up. For example, in the case of Korea, Korean imports into the U.S. are up and U.S. exports to Korea this year are about one-half what they were last year, about $12 billion or $13 billion less. But that's understandable because of the economic problems.
I say that just to tell you, sir, that what we're trying to do is to help all the Asian economies and the Russian economy and others by keeping our own economic growth going, but also keeping our doors open so we can buy products in tough times and help our trading partners.
Now, here is the problem. If we have a big increase in our overall trade deficit and it's evenly spread, that's something we can live with for a year or two. But as a practical matter, if it's all concentrated in one or two areas, then our industries, which are in normal times quite productive, could be put out of business and they could find a very hard time getting back in business when the economy improves, because of the cost of starting up.
We went through a big restructuring in our steel industry in the 1980s. We cut employment a lot. It was very painful for our union members and for our executives. And we have been doing pretty well. And you have to see the Korean experience, which is basically about 140 percent increase, 120 percent increase in exports to America in steel this year, against the background of what's happening from other countries.
In Japan there is a 500 percent increase in hot-rolled steel products; in Russia, 300 percent increase. A big increase from Brazil.
So we have the American steel industry saying, okay, we want you to buy more products from other countries. We want you to help them in this tough time. But if it's all coming at our expense, when in normal times we are quite competitive, then what happens when normal times recover and we're not around anymore?
So that's what I'm trying to -- we're trying to balance that. So I guess what I'm saying, President Park, is, I agree with you. The United States should keep our markets open to the rest of the world and help our friends deal with this crisis. But we have to be sensitive if the price of doing that would be to basically erase a big part of our economy which then could not come back when normal times recovered. So we're trying to balance two difficult things.
Q Dr. Sohn, would you like to respond to some of the President's questions?
Q I'm not an expert in economics and I've been working for the political rights of women. However, since the IMF crisis, as we call it here in Korea, has occurred I believe women in Korea are suffering the most. Because people have to be fired and naturally, if I may say so, women are on the top of the list, because they don't believe women are the breadwinners of the household. So they say that, "Well, you have your husband," or, "You have your father so you should leave the company."
And even though the woman's husband is unemployed, indicating the husband is unemployed, it's the housewife that suffers the most because she has to make ends meet. And with many people, both men and women going out of work today the traditional family values of Korea are being eroded. And so we all hope that the current crisis, the IMF bailout package, will go away soon and so that the situation can be reversed.
There are many problems but I believe the most important issue that we have to talk about is the political corruption in Korea that was actually one of the main causes for the economic problem. The weak banks received favorable loans and we all know this was one of the main reasons for the financial crisis. So this leads to the political corruption issue in Korea.
So I'm very interested in this issue and I believe women are also very interested in the economy as well. A strong economy is a necessary factor for democracy, I believe, and because of this, if the economy continues to deteriorate I believe the democracy that people have worked so hard to build up for decades and decades will suffer. And the deteriorating economy will act as a barrier to further democratic development. Thank you.
Q Chairman Park, you are one of the representatives of the corporate sector here. As I indicated earlier you have the distinction of having headed a corporation that started restructuring even before the crisis began. I wonder if you would like to share some of your thoughts on the points that President Clinton raised.
MR. PARK: Yes, thank you. I think I am the representative of the business sector in Korea here today. And let me talk about my company. Dusan (phonetic) embarked on a restructuring project because we needed to. People are saying, "Why did you being before everybody else?" We started in 1995 and actually 1996 is the 100th anniversary of the establishment of our company so we talked to the people at MacKenzie (phonetic) Consulting and said we survived for 100 years how can we go on for another 100 years. And the people at MacKenzie told us, well, if you don't restructure, you won't be here in 100 years. So we realized that was very important. It was very hard, very painstaking.
We sold many assets, many companies. But I'm still here and I think that restructuring effort made this possible.
Before I came here this afternoon, I listened to the press conference and I heard about the restructuring that President Kim Dae-Jung talked about as well. In my opinion, during the past 30 years, Korea focused only on growth. But since last year and the IMF crisis, people are realizing that this is a big crisis, and they don't know what to do because we've only been developing and growing for the past 30 years, so we're at a loss now.
But fortunately, President Kim is now our President and he has a very firm, strong commitment. And he understands the situation that Korea must strengthen its international competitiveness. And I believe the President also understands the importance of mergers and acquisitions as well, and he is pushing for further restructuring.
The business sector, I believe that when we started restructuring three years ago, we felt that it would be a very hard process, and indeed it was. It took one year to convince everybody in the company that we needed restructuring. So for one year, we talked to people, we held discussions, and we convinced the people. And then we made plans.
And on the third year, we finished our restructuring project. The government is saying that we have to hurry and we have to be more quick in restructuring. But from my personal experience, I think it will take time, because if we go to fast, there are risks. And if we really want a good restructuring, not just any restructuring project, we have to look at the experience of other companies -- companies from advanced nations.
And in terms of investment policies, we have a lot to learn from the advanced countries and the corporations of advanced countries. People say good things about me and about my restructuring program, but, very frankly, I did it to survive. Thank you.
THE PRESIDENT: Can you tell us exactly what you did? In the restructuring, did you change the organization of your company, did you reduce the layers of administration, did you reorganize the way the workers were working? How did you restructure your company? What were the two or three most important elements of your restructuring? MR. PARK: One of the first things we did was we invested a lot jointly with American companies. With 3M, Eastman-Kodak, we held joint ventures -- and Nestle and Coca-Cola. Coca-Cola bottling used to be our company, but we sold that because we needed the cash. And selling off all those joint ventures helped us to increase our cash flow. And also, we sold off a lot of real estate. And after we did that, we made sure that all the employees were retained after we sold off the companies
We used to have 20,000 employees, but after the restructuring, we only have 9,000. But we didn't fire anyone. What happened was, we implemented early retirement programs or strengthened our pension programs in order to provide incentives for people to leave.
And in terms of our organization, we focused on the cross-guaranteeing system that's really a big issue in Korea -- the cross-guaranteeing of loans for subsidiaries. We established Dusan Corporation and we merged nine separate companies under the Dusan Corporation title. And that means we had nine accounting leaders so we would have to reduce the number. So we had some problems, but that's the overall story.
Q You are leading a company that in many ways I think represents much of the economic hope of Korea. One of the inevitable consequences of restructuring is that the number of jobs declines. And for Korea to overcome its unemployment problem new companies have to create new jobs in industry and international he services sector. I wonder if you might share a few thoughts with us on how you see this particular question.
Q First of all, Mr. President, I would like to relay a greeting from my son who is third grade, because when I told him that you invited me he was very excited and he told me to say hello, how are you, in English. So before I talk I would like to tell you this -- because I promised my son, so I have to go back and tell him that I said so.
I am the president of a small company and I don't have a lot of experience in managing a company. However, since the IMF situation we had to conduct some restructuring and some reforming in order to enhance the funding of our company, and like Chairman Park talked about we did have some painstaking efforts as well. Let me talk about this.
I believe one of the main causes for the IMF situation is the resources, the financial and human resources of Korea have not been effectively utilize. Many of the financial and human resources have been focused on big companies. But when we look at this in the terms of market economy this is not natural. We have to focus the human resources and financial resources on companies that can actual reap added value. However, that has not been the case. And this vicious cycle has been going on for decades and I believe this is one of the main reasons for the IMF situation.
However, I would like to say that I have strong confidence in the Korean government. There are many restructuring programs being proposed, but I believe the most important are the programs that deal with diversifying the deployment of financial and human resources. And the financial restructuring program of the government, I believe, is on the right track.
So, in the future, I believe companies like my company or other venture companies will be able to be the driving force behind the further growth of the Korean economy in the future and we will contribute to the creating of added value. If I may add one more point.
Recently Motorola, one of the biggest telecommunication companies in Korea invested in our company. I am the largest shareholder and Motorola is the second largest shareholder. People say I am the richest man in his thirties in Korea but I don't know if this is true. Anyway, so I want to talk about this. And I believe the fact that one of the biggest telecommunications companies, Motorola, invested in our company is very good. It gives us the opportunity to venture into the international market. And after the Japanese occupation between 1910 and 1945 we had President Park as our president and he really forced the economic development. And he, I believe, he imposed the current political system, the democratic system, of the United States on Korea. There were bad things and there were good things and I believe that in the future that American companies and companies like my company have much to do together. Thank you very much.
Q Dr. Yoo, do you have some thoughts you would like to share with us?
DR. YOO: Yes, thank you. I've been listening to what people have been saying but I have a little bit different angle of approach. Like you pointed out, Mr. President, there are unique characteristics to each individual country, and Korea is not an exception. And in that line, I believe the unique characteristic of the Korean economy is the conglomerates. And as Mr. Park pointed out, the problems of the conglomerates is one of the main reasons for the current crisis.
However, I think we have to realize that the Korean society is like a pendulum. It swings back and forth. During the past 30 or 40 years, when we look at the method of the development, we looked only to the conglomerates. They were our models. But now, all of a sudden, if we overnight try to say that the conglomerates are wrong, I believe this could lead to an identity crisis in a way. The United States government, the IMF, the IBRD, and other international organizations are saying to the Korean government that the conglomerate restructuring and reforms are too slow, that they are unsatisfactory, and they're saying this very openly.
However, if such influential opinions continue to flow into Korea, there might be a conflict in Korea. I'm not saying that we should stop the information, but I'm saying that there could be a conflict.
The Korean government has many programs, and I believe maybe 70 or 80 percent of the programs are very good and are on the right track. But if we continue to criticize them too much and if we focus too much on anti-competitive methods, saying that trying to bring down the conglomerates competitiveness overnight in the long-term this could have some bad effects. For instance, would could restructure all the conglomerates and even kill the market in some parts. But in the end it might even strengthen the power of the government or the officials, they might take over the economy.
This is very ironic. We've been trying to get away from the government and the officials for so long, but that might come back. So I would like to ask international organizations or the United States government to maybe try to understand the Korean situation and maybe try to compliment the Korean government on what they're doing right and criticize what they're doing wrong -- not just criticize it and say that the government has to speed up the conglomerate, period.
Just speed and the big deals that we've been seeing in the newspapers, I think they're too fast and they're being forced a bit also. Many people are very keen on the issue of the codevelopment of democracy and economy. This is a big proposition in Korea. I believe that democracy has to do with doing good and the growth of the economy has to do with doing well.
But it's not as easy as these words. It's very difficult and there are conflicting aspects, as well. Democracy and economy does not always go hand in hand. In Korea we're not accustomed to this conflict and we're taking it back. We're talking about the corruption or abuse of power of the politics and economy. But when this conflict actually occurs, I don't think we have the experience or the know-how of how to deal with these issues.
So if we just talk about democracy and market capitalization as a political slogan, this could have some negative effects. And some people are thinking it's a very easy thing to do -- which it isn't. And I believe the United States had experience of labor issues and big businesses and every time
these issues occurred I'm wondering what happened to the United States, how that was harmonized or balanced with the political democratization of the United States. So maybe we could share our experiences in these aspects in the future as well.
Thank you very much.
THE PRESIDENT: Well, first of all, I would like to say in response to the last comments that you made, that it is both my experience over the last 25 years and my observation of our history and global economic history that there is no economic model that succeeds forever -- not in a business or in a country -- because the very nature of the economy is the dynamic.
So I think that Korea should not, in effect, rewrite its own successful history. This country has done some very great things in the last few decades since the end of the Korean War. And no economic model succeeds forever. I mean, keep in mind, today people come up to me and they say, all over the world, oh, America is doing so great. Well, you know, 10 years ago people were saying, oh, America is in decline and they can't do anything right. Things change. So the trick is how to make the necessary changes and preserve the purpose of economic activity, which is to advance the quality of life, to lift people's lives.
So that's just a general observation. Now, I think Chairman Park made a very valuable point, which is that it takes time to change an organization if you wish to preserve the integrity of the organization and you want it to work, and also if you don't want to hurt a lot of people. He cut the size of his operation by 50 percent, so if you want to do that it takes time.
From my point of view, my impatience on the restructuring of the big five, I would say it should take time and we should be patient, but they should begin -- they should begin. That's what we're interested in, are they going to begin.
From the point of view of President Park over here who was talking about his new business and his partnership with Motorola, I believe that one of the things that we should be very sensitive to in the United States, particularly dealing with Korea, since we have been through a lot of this, is if your big companies are going to restructure and reduce employment to increase profitability and their ability to compete, then I think it is very important that there be systems in this country that encourage the creation of more new companies. That's what you were talking about.
In the U.S., one of the most important parts of our economy is the so-called venture capital economy, where we have new companies being created all the time, or smaller businesses being expanded all the time. And so I think it's important, even though there have been a lot of bad bank loans and people are worried about bad bank loans and everything, we have to realize, when all this is said and done, you must still have a good credit system here where people who have something to do should be able to borrow money to do it. I think that's very important.
The last point I would like to make is that -- just about what all of you have said - is to go back to what Dr. Sohn said about the women. The more rapidly an economy or a society changes, whether it's going up or going down, but especially if it's going down, the more strains will be put on family life.
Now, I believe at least, the most important work of any society is the raising of children. And in a funny way, we have opposite problems. Many people believe in America too many of our parents are in the work force, so nobody is home with the children. But in most Asian societies it's a good thing if you can have more opportunities -- job opportunities for women so there can be some more balance and more income to raise the children.
So I think it would be a very good thing -- I don't have the answers to this. What I have seen, though, in our own experience, is that there is no perfect answer, but there is a good process. And a good process is one that takes full account of the interests and feelings and ideas and opinions of the women of the society.
That is, what would be the best answer for Korea would not be the best answer for Thailand, would not be the best answer for the United States. But there is a good process, and in too many places in the world today women are used economically when it's convenient, and then discarded when it's not, and their voices aren't heard. And I think that's a mistake. So I think what you're doing is very important.
I wonder if Senator Baucus or Secretary Koh would like to say anything.
SENATOR BAUCUS: Mr. President, I think you've hit upon something, and I'd just like to ask a question of our Korean hosts here. I have very strong faith in the Korean people. I think Koreans are tough, they're hard-working, they've gone through a lot, they're terrific people. I mean, after the war, the society that Korea has built up -- the trees that are planted and the Korean people contributing gold to help raise the country -- it's incredible. And I don't know another --
THE PRESIDENT: It's amazing. There's no other place in the world --
SENATOR BAUCUS: It is. There is no other place. There is no other country in the world where one could find that. And when I sat in the Congress when President Kim addressed the joint session of Congress, I was so proud of him and of Korea. That was one of the best speeches I've heard anyone give. Even as good as one of yours, Mr. President. It was very, very good, because it symbolized the strength and purpose and resolve and for the goodwill of the Korean people.
And obviously what we're trying to do here is find solutions that help our people, and that's why all of us basically do what we do. And I'm wondering if one way to help
assure the kinds of restructuring we want and the correct investment for value that we're talking about and women's rights and to reduce corruption, et cetera, is for still more democracy -- even more, say, in Korea.
I get the sense -- and correct me if I'm wrong -- to some degree the government sort of helps producers -- restructures to help producers, et cetera, and I'm wondering if perhaps the government ought to not only be concerned about producers, but also about consumers, and give consumers more power and more rights, because when consumers -- voters -- have more power and more rights, it's going to force more competition and it's going to force the kinds of investment choices that we want, because people will want the best. They want the best products. They want the best benefits. They want what's best for their life.
And I'm just wondering if somehow there might be some way Korea could help empower consumers, but in the Korean way, so that there is a dialogue within Korea as to how best to do this, but empowering consumers more and empowering shareholders or empowering voters a bit more, if there is a way to do that, to help speed up this process and accomplish the objective that we're looking for.
Secretary Koh, do you have anything you would like to add?
SECRETARY KOH: I'm just struck by the difference between the mood now and when I came to Korea in the summer of '74, which was a similar period of economic hardship. In that summer everyone was talking about the need for export-led growth but controlled by an authoritarian government and the feeling was until we reach a certain standard of living we can't afford democracy and freedom. And I remember at the end of that summer there was an assassination attempt on the President's wife and at about the same time Kim Dae-Jung had just been kidnapped and was under house arrest, and at that same time I was here watching President Nixon give up his office.
And I called home and I said to my father, how can it be that the most powerful country in the world can surrender -- change power when Korea has never had a peaceful transition of government. And he said to me, the difference is, in the United States if you're a President the troops obey you, in Korea if the troops obey you then you're president.
Now, when I see where we are now, and what we're describing, we've now had a peaceful transition of government here. We now have a commitment to democracy. There is now faith in democratic institutions and the feeling that market solutions can be found by various kinds of private initiatives -- for example, partnership with Motorola, voluntary restructuring, talking about the social safety net, worrying about human rights. There is a new commitment here to do it with democracy, not to go back. That is what I think is an inspiring message even in this very difficult time.
Q President Park, I've been signaled to draw the roundtable to a conclusion. Do you have some final remarks?
MR. PARK: Thank you very much. I have to say that we're very honored to have this opportunity to talk to you, Mr. President. In June we went to Geneva and we talked to many people there. But like many people mentioned, the Kim Dae Jung government was born out of our past.
In the past we had a military and authoritarian government but the Kim Dae Jung government has broken away from this past. In the past our political system was just very chaotic and many people say that the labor unions in Korea are too strong -- used to say that we were too strong or too aggressive, but I believe the situation has changed now. And everything that we experienced in the past has provided for the environment for us to develop our democracy and to maintain the economic growth.
However, when we look at the neo-liberalism like Professor Yoo pointed out, the democracy -- to pursue democracy and economy all at once is really a very difficult thing. Just perusing economic growth turns to put some shadow on democracy and vise versa. However, in the perspective of the laborers, of the workers of Korea we believe that democracy is very important
for the development of economic growth. So it's a balancing act, it's a seesaw, it goes back and forth and I believe many that's why the people of Korea lack some confidence of what the government is trying to do because of our unfortunate past.
However, I believe if the United States and other countries assist us to balance this seesaw we can succeed in our end and also there are many American forces stationed here in korea, they're working very hard for our country. And we have 15,000 Korean people, Korean nationals working for the U.S. forces.
However, because of the cut in the U.S. armed forces budget people are saying that about 2,000 Korean nationals currently working for the U.S. forces might be fired. But if that happens, that is very unfortunate because Korea as a whole is suffering because of the unemployment. But if 2,000 more people become unemployed due to changes in the U.S. forces system, maybe that could aggravate the situation.
So maybe if you could look into this matter, Mr. President. And also if the United States government tries to have a clear perspective of the workers and the government and the businesses I believe we can all work together and we would really appreciate your assistance. Thank you very much.
DR. SOHN: Like I said, I worked for the enhancement of women's political rights. And, Mr. President, I would like to say that I'm very happy that the Secretary of the United States is a woman. I was very happy to see that happen. I think that sends a very strong message. It's not just for the United States that you're Secretary of State is a woman -- it influences other countries, like Korea. So if you could continue to go down this path and have more women working for you in your Cabinet it would be very good.
We are at a very transitional stage. We're on the brink of the 21st century. Korea is trying to change from a state centralized system to a civic system. And in this environment the role of the non-government organizations, NGOs, become even more important, I believe, for the growth and the development of this civil society and the growth of the NGOs. I hope that you continue to have keen interest in these areas, Mr. President. Thank you.
THE PRESIDENT: Thank you. She has done quite a wonderful job, our Secretary of State. And we have six women in the Cabinet now, including the Attorney General and the Secretary of Health and Social Services, the Secretary of Labor, the head of the Environmental Protection Agency, and the head of the Council of Economic Advisors, and our Trade Representative -- seven women in the Cabinet -- our Trade Representative. We're better for it, they're very good. Thank you.
Q Mr. President, do you have any concluding remarks you would like to make?
THE PRESIDENT: Does anyone else want to speak?
Q Mr. President, in the beginning you said that family values are very important for all countries in the world. Since the economic crisis and during the process of restructuring the family structure of Korea is suffering, especially our middle class is suffering.
Of course, many Korean people -- most of the Korean people, the majority of the people have strong confidence in the market economy, in democracy. And people were also very worried about the labor union issues after the IMF situation began. But that worry, that concern turned out to be false. Everybody is working together. However the middle class is suffering and the family values are suffering in Korea.
So I just wanted to make two points. First, the World Bank and the IMF and the United States government is providing a lot of assistance to us and we appreciate that. However, when we look at the unemployment issue of Korea we have some area for improvement and I would like to ask for your assistance to the Korean government in their unemployment policy, also.
Like Chairman Park pointed out there are companies that have succeeded in restructuring, however, the workers and laborers of Korea are suffering. They are willing to share the burden. Our workers are willing to share the burden, however, the conglomerates don't seem to budge and the smaller companies are actually succeeding in the restructuring but when we look at the overall restructuring efforts of the conglomerates they're not providing much benefit to the everyday lives of the people. And also, this has much to do with the accountability of corporate governance.
The Korean government is in the position to continue to pursue the open economy which is good. So, I would like to ask for your assistance in this area as well. Thank you very much.
PRESIDENT CLINTON: Anything else?
Q If I may, Mr. President, I would like to say that the Korean economy is closely linked to the economy of the United States, imports, exports, and I believe we're one of the top three export-import partners of the United States. So the growth and the recovery of the Korean economy is good for the United States and vice versa. So, as we know, the Federal Reserve lowered the interest rate to assist countries like us and I think that was very good, however. I have actually lived in the United States. I studied there. And I personally am very fond of the United States. And I believe our economic growth has much to do with the assistance of the United States. So my last remark is, we would appreciate it greatly if the United States continues to extend such support and assistance. Thank you very much.
THE PRESIDENT: You may be sure that we will do that. I think that we have to do more in many ways. We just announced a U.S.-Japan Asian Economic Initiative to try to work with the World Bank -- I mean the IMF -- to help restructure some debt in countries where you have to restructure corporate and business debt, longer-term repayments, do things that will keep employment up. We have more active presence of our Export-Import Bank and our Overseas Private Investment Corporation to try to facilitate economic activity in Korea. I think all this is important.
But I also believe it's quite important, if you're going to get into this restructuring of the conglomerates, you have to also say, where are the jobs going to come from? And part of what Senator Baucus was saying, that means you have to have a strong consumer ethic in the country, as well as a savings ethic.
But I believe some real attention needs to be given -- and I would support this -- toward analyzing whether the banking system has adequate for businesses like yours -- for start-ups, for expansions, for going on, because the Korean people are so innovative, they work so hard, they're so gifted at economic things naturally, that if the system is open properly, I think you could have quite a quick recovery. So I think that ought to be looked at.
I just want to say one final thing about this. I haven't mentioned it and we don't have time to talk about it now. But the rest of us -- the United States and Europe, Japan, and Korea as an OECD member -- we have responsibilities to deal with the problems that would be there if you solved all these issues. If there were none of these issues we just talked about, fast-growing countries would still be vulnerable to the kind of suffering you've seen because of the way money moves around the world today.
You talked about to me about the trade issue in steel. Now, steel -- let's just take steel, for example, any product. It's traded across the world under a set of rules governed by the WTO that basically re-adopted the last system in 1995 -- or '94, I guess, December of '94, the present WTO -- in the United States, at least, we did. But it's essentially an outgrowth of a 50-year-old system. From end of World War II, we established these institutions for trade in goods and services -- the IMF, the World Bank, the trading rules -- and to help countries that were struggling and like that.
Money has to be able to move around the world if you're going to trade in goods and services. But one big problem is that now $1.5 trillion is traded every day in currency -- trillion dollars. And money can move very rapidly. So if the Korean conglomerates or Korean banks, you know, well they have a big demand for money, the money comes in. And there is a lot of enthusiasm because Korea has been growing for 30 years and no problem, you know.
Then the problems come up and, boom, the money goes away. And if people lose money, then maybe they have to take money out of other countries, too, to cover their losses. To make matters more complex, a lot of this money is traded or moved on a very small margin, sometimes only 10 percent.
Now, there are no rules in the global economy comparable to the trading rules that govern our business in steel eventually -- let's suppose we have this big argument about steel, eventually we have to go back to the rules. And whatever the deal is, it's limited, there's some limit on both sides so we can go on and do our business.
In this area, there aren't that many rules and it has created a serious problem that makes every country -- particularly the Asian countries because you've got so much money coming in -- highly vulnerable to all the money going out. And what we have to do is to find a set of rules about, well, what do people have a right to know when they get loans, how are these loans going to be priced, should there be margin requirements on the derivatives and the hedge funds and all this sort of stuff and all these things.
We don't have time to get into the details. The only point I want to make is I would recommend that you focus very closely on what you should be doing in Korea, both within your own area and in the society at large. But don't be fooled, when $1.5 trillion is moving around the world every day, then the possibility for instability is great and we need a set of rules the will enable the financial system to grow in the same way that the trading and investment system has grown.
So you can high levels of growth, but still some limits to avoid a big collapse. And that's one of the things we're trying to do. And you should not blame yourself for that, because the situation here is worse than it would have been because of the volatility and size of the financial crisis. The same thing is true everywhere. We have to keep the money flowing, but we have to figure out how to keep it from getting out of hand.
Q Mr. President, I think you've just given us the subject for our next roundtable. (Laughter.)
I want first of all to thank our Korean friends for joining us here this afternoon. I want to thank you, Mr. President, for giving us all the opportunity to have such a stimulating discussion. And I want to thank Senator Baucus and Secretary Koh for joining us as well. I want to thank you, Mr. President, in particular for giving me the opportunity to serve as your representative in this country at this fascinating time. It is truly a life experience. PRESIDENT CLINTON: I envy you. It's a good job. Thank you all very much.